BlackRock CEO Larry Fink writes that it's not enough for businesses to have a purpose, CEOs should also take on a leadership role on social and political issues
BlackRock Inc has released its chairman and CEO Larry Fink’s 2019 annual letter to CEOs in which he calls on CEOs not only to focus on more than delivery of financial returns as he did in 2018, but to also take a leadership role on social and political issues.
Companies need to adjust in line with higher stakeholder expectations: 'Companies that fulfill their purpose and responsibilities to stakeholders reap rewards over the long-term. Companies that ignore them stumble and fail. This dynamic is becoming increasingly apparent as the public holds companies to more exacting standards. And it will continue to accelerate as millennials – who today represent 35 percent of the workforce – express new expectations of the companies they work for, buy from, and invest in'.
In a climate of uncertainty (and especially in the absence of government action), CEOs need to take a leadership role on social and political issues: 'Stakeholders are pushing companies to wade into sensitive social and political issues – especially as they see governments failing to do so effectively. As CEOs, we don’t always get it right. And what is appropriate for one company may not be for another. One thing, however, is certain: the world needs your leadership'.
Retirement is one issue where companies and CEOs can take a leadership role: 'Companies must embrace a greater responsibility to help workers navigate retirement, lending their expertise and capacity for innovation to solve this immense global challenge'.
BlackRock Inc has released its chairman and CEO Larry Fink’s 2019 annual letter to CEOs in which he calls on them not only to ensure their organisations have a 'purpose' and deliver more than financial returns to stakeholders as he has done previously, but to take a leadership role on social and political issues. A high level overview of some of the key points raised by Mr Fink is below.
[Note: The 2019 Edelman Trust Barometer appears to reflect a number of themes highlighted by Mr Fink including increased expectations of CEOs, and more particularly, the expectation that CEOs should step in to take a leadership role on a range of issues in the absence of government action. The findings of the Edelman Trust Barometer are discussed in a separate post. See: Governance News 23/01/2019.]
[Sources: BlackRock: Larry Finks Annual Letter to CEOs 2019 18/01/2019; The New York Times 17/01/2019; Forbes 17/01/2019; New York Post 17/01/2019; [registration required] The AFR 18/01/2019; [registration required] The FT 18/01/2019; Financial Standard 18/01/2019]